Employer Health Premiums for Family Coverage Rise 7% to $25,572 in 2024
Annual family premiums for employer-sponsored health insurance have increased by 7% for the second consecutive year, reaching an average of $25,572 in 2024, with employers bearing the brunt of the cost, according to a recent employer survey by Kaiser Family Foundation.
The survey, now in its 26th year, provides a detailed look at the trends affecting the 154 million non-elderly Americans who rely on employer-sponsored coverage.
While total premiums for family coverage have risen steadily, the amount workers pay on average toward their annual premiums has only increased modestly over the past five years. While the annual family premiums for employer-sponsored health insurance rose 7%, the amount that workers contribute has risen less than $300 since 2019, a total of just 5% over that five-year period, according to KFF. On average, workers now pay $6,296 annually toward the cost of family coverage.
“Employers are shelling out the equivalent of buying an economy car for every worker every year to pay for family coverage,” said KFF President and CEO Drew Altman.
Some of the nation’s largest employers are taking steps to shield lower-wage workers from rising health care costs. Among firms with at least 5,000 workers, 29% say they have a program to reduce premiums for lower-wage workers, and 19% offer a more affordable reduced-benefit plan, the survey shows.
Among workers facing an annual deductible for single coverage, the average deductible stands at $1,787, up a modest 8% since 2019. However, there is a significant discrepancy based on size of the employer. Workers at small firms (less than 200 workers) face much larger average deductibles of $2,575 compared to $1,538 at larger firms (more than 200 employees). Nearly a third of covered workers at smaller firms face an average single deductible of at least $3,000.
Coverage of GLP-1 Weight Loss Drugs: Limited and Restricted
Amid booming interest in costly new GLP-1 drugs like Wegovy for weight loss, fewer than 1-in-5 large employers are currently covering these medications, according to the survey. Coverage is somewhat more common among jumbo firms with more than 5,000 workers, with 28% of these companies saying they cover GLP-1 drugs compared to just 18% of all large employers.
The decision of whether to cover GLP-1 drugs has significant cost implications for employers. A previous KFF analysis estimated that almost 50 million adults in employer health plans meet the clinical criteria for taking such drugs, which can cost thousands of dollars annually per person. Among the large firms that do cover GLP-1 drugs for weight loss, a third say it will have a “significant impact” on their prescription drug spending, the survey found.
Even when employers do decide to cover GLP-1 drugs, the coverage often comes with strings attached. Among large firms covering the medications, about half have conditions or requirements that could present obstacles to access for workers. These include requiring meetings with dieticians, psychologists or other professionals (24% of firms); requiring participation in a lifestyle or weight-loss program either before (8%) or while (10%) taking the drugs; or imposing some other type of condition (26%).
“Employers face the challenge of integrating these potentially important treatments into their already costly benefit plans,” said KFF Vice President Gary Claxton. With obesity affecting over 40% of American adults, a huge population could potentially qualify for GLP-1 drugs if employers choose to cover them. But with the high price tag, it remains to be seen how widely available these medications will be for workers struggling with obesity.
Other Notable Findings
The survey also looked at coverage of family-building benefits like IVF, rebates from pharmacy benefit managers, abortion coverage, mental health services, and spousal coverage incentives.
About a quarter of large employers cover IVF (27%) and artificial insemination (26%), while more cover fertility medications (37%). Only 8% of large employers say their plan does not cover legally-provided abortions under any circumstances, little changed from 2023, KFF reports.
When it comes to mental health, about half of large firms have increased mental health counseling resources available to workers through employee assistance programs or third-party vendors. However, a quarter of employers offering these benefits say their plan’s network for mental health and substance abuse services is “somewhat” or “very” narrow, compared to 10% who say the same about their networks generally.
The survey also found that among the largest firms with at least 5,000 workers, 34% say they receive “most” of the rebates negotiated by their pharmacy benefit manager (PBM) or health plan, while another 34% say they receive “some.” PBMs manage prescription drug benefits on behalf of payers, including employers, and typically negotiate rebates with drug manufacturers in exchange for favorable placement of their drugs on formularies.
Finally, the survey looked at spousal coverage incentives. Among large firms offering health benefits to spouses of workers, a quarter (24%) either require higher premiums or restrict coverage when spouses were offered health insurance from another source. Additionally, 12% of large firms provide extra compensation or benefits to employees who enroll in a spouse’s plan, and 13% provide extra compensation or benefits to employees if they do not participate in the firm’s health benefits.
View the full survey here. &